Advice on Financial Goals before TTC

[rawnjaze]

@victoriablackwell

1. My DH and I are lucky in a few different ways. We have amazing, low cost health insurance and will not need to save more than a couple hundred for that, but make sure you have enough set aside to cover medical bills! We were also lucky enough to graduate college with minimal loans and had those paid off years ago. As far as saving, we wanted to have enough set aside to cover 12 weeks of my pay and at least 2 weeks of DH's pay with a buffer. We have been able to put away a decent amount monthly and live in a lower COL area, so the amount we are putting away should be enough to cover daycare when that time comes.
2. We try to do things that will be more difficult with a baby. Go out for bloodies and bar bingo on a random saturday afternoon, hit up a winery or brewery, stay in bed all morning and watch Netflix, take a random day or weekend trip. Also, planning things to look forward too helps. Get tickets to a local music show or festival. Maybe a sporting event if you are into that kind of thing!
   

I know that was kind of rambly, but hopefully it helps a little bit!

 

[martod]

@rawnjaze I support #2! We're getting some traveling in before ttc and it's lovely memories to make together as just husband and wife. Having a little "before baby bucket list" has been helpful in making me feel ready.

 

[gary1993]

@victoriablackwell Just before we got married, we didn't have any debt (except for our mortgage), but we had a goal of having 8 months of combined salaries in our savings account before TTC our first. We wanted to have a good safety net for when I'd be on maternity leave (not full-pay during that time, and I'm the breadwinner), and also anticipated the immense cost of daycare.

 

[victoriablackwell]

@gary1993 Thank you. Unfortunately we do have quite a bit of debt, between student loans, my car loan (almost paid off though!), and credit cards. So maybe we should
Focus on eliminating the CC debt first??

Having 8 months’ worth of combined salaries is impressive—how long did it take you to save that up? Yeah, daycare prices scare me lol.

 

[gary1993]

@victoriablackwell We'd already had about 6 months of combined salary saved up, and after getting cash gifts from our wedding, that helped us get the rest of the way. So it didn't take very long, as we started TTC about 6 months after getting married.

CC debt is definitely bad debt, and I personally have never had any, so if I were in your situation I'd likely attack that first.

 

[martod]

@victoriablackwell Are you me? I just turned 30 and am in a similar boat; work for nonprofit, cc debt, student loans, car payments and insurance, other regular bills, and have a 1 bedroom apartment with my SO. Luckily, he has a well paying job, but we're still a long ways off from being ready financially. I think I can get a daycare discount through work, but I need to do some more digging as I haven't found that yet.

As much as I would love to have no debt and a house, it's probably not realistic for a good number of years. I wanted to start ttc a few years ago, but I was too worried about finances and my career that I let the fear get to me and pushed it back each time we the Talk. As my SO (and many other people have told me) said, "there is no right time and you may never feel ready. That's ok. We'll make it work when it happens. We'll be ok." And after hearing him say that, along with some input from co-workers who have kids, I feel ready. I'll probably have debt I'll be paying off for another 20 years, but I'm not getting younger (I currently have some knee problems) so I feel the time/age pressure already.

If you can save some money, great. If you guys can figure out how to make it work now/soon, then go for it (if you feel ready). But everyone has their own path, so take my advice with a grain of salt. Good luck!

 

[victoriablackwell]

@martod Thank you for this response... I was starting to feel like a failure with my debt and low paying (but rewarding and necessary!!) job lol. I’m in a public service loan forgiveness program, so I’m not too worried about my student loans, but I am worried about my credit card debt. (That said, I paid off a good chunk this winter).

But at the same time.... how long can I truly wait? I’m already paranoid as it is about fertility issues and aging. I agree that I’m not sure I’ll ever feel totally ready from a financial standpoint, unless my husband suddenly gets a way better paying job, or some other windfall occurs. So I appreciate that you’re not ruling out TTC in less-than-ideal circumstances.

 

[ro72]

@martod Similar story here too. I’m 31, currently in grad school and making kinda crappy money, paying down loans from undergrad and my car. Husband has a decent paying job so we don’t have to worry about making our regular bills and allowing for some small luxuries, but we aren’t exactly making bank (around $75k combined). We ideally wanted to own a house and have no debt before TTC but... guess what... WE READY NOW

Good luck, amigas!

 

[martod]

@ro72 We realized that if we waited until we were really ready, we'd be like 50-60 lol. That might be an exaggeration, but probably not far off.

Good luck to you!

 

[daniellea]

@victoriablackwell I initially said "house, reliable vehicles, 15k and no debt" (wanted more but same boat- living frugal but wasn't making bank).

I had to adjust my expectations a bit... we got a small condo instead of a town home (was disappointed at first but its cozy, has a spare room and works for us- cant beat our mortgage...half of what we paid for rent on a sketchy studio place!). We have paid off vehicles (they run- 1 is reliable), no debt and 10k of savings.

I feel like every time we push for more, something happens - car dies, something needs replaced, etc. 10k is something at least; it gives me a little peace to know we are leagues better than my parents were!

 

[victoriablackwell]

@daniellea Wow! Those are ambitious goals.... I would love all of that too! Lol. Is the $10k a combination of emergency savings fund/baby fund?

Yeah..... we only have 1 car but it’s reliable and should last many more years. The trouble is, to keep a 1 car lifestyle feasible, staying in the city is best but then the rent/house prices are higher. We do however have some debt and I’m not sure if we should prioritize paying that down over saving aggressively for house/baby. :/

 

[daniellea]

@victoriablackwell Yes, the 10k is the combo our emergency (3 months of expenses) and baby fund.

As said, we don't make bank but try hard.

 

[soulcrafter]

@victoriablackwell Dave Ramsey is a great resource for learning how to get out of debt. Basically, pay off your smallest debt first, then add whatever your monthly payment was for that to your next smallest debt. Keep rolling up your payments until you get to your big ticket items. He also recommends giving yourself a cash payday at the beginning of the month and using that cash to pay for everything. It helps you recognize how much you're spending and on what.

I've also recently discovered a method of budgeting called "kakeibo" which is a Japanese method of journaling your expenses each month to see realistically what you're spending money on and helps you decide where you can make changes.

 

[moshia]

@soulcrafter Paying off debt this way can feel more emotionally satisfying, but if her CC debt is anything typical (like 22% interest) then it makes absolutely no financial sense to pay off a smaller loan with lower interest first. Purely financially speaking, it's smartest to pay off the debt with the highest interest rate first.

 

[dasham]

@victoriablackwell Financial goals: Our only debt being the mortgage was a big one for us. We aggressively paid off our "adopted" Hertz rental cars, both Toyotas for longevity, and right now we have 9 months in an emergency fund. We have a plan to save for the insurance deductible during my actual pregnancy, but my field is in a bust so who knows how that will pan out! Planning finances is a big part of coping for me.

Additional Coping: Counseling, reading, extra walks, tangible goals before TTC, and talking to peers about it.

A piece of advice that's really stuck with me is that motherhood is full of sacrifice. Sacrificing your wants for a child right now for a better situation for said child in the future is a very mom thing to do. At least, that's how I took it! It's still hard to wait, though.

 

[victoriablackwell]

@dasham Thank you for replying. I would love to pay down our debt as well. That’s amazing you have so much in your emergency savings!! I would love to have that much someday.

Thanks for sharing coping mechanisms.... I’ve actually been thinking that going to counseling would be good for me since I’ve been feeling hopeless about this situation lately. I’ve also been trying to workout more and lose weight before TTC, which gives me something to work at. Hard to wait, for sure though.

 

[katrina2017]

@victoriablackwell Prioritize paying down the debt for sure

 

[katrina2017]

@victoriablackwell Let me first start by saying I feel you! Some days I just want to say screw the plan that we've created. Me and my hubby set minimum savings goals we MUST reach before TTC. We also set our ideal savings goal of where we really desire to be financially before TTC. We did this because he knew I might get antsy lol.

I will warn you, the way me and my husband budget is far from the way most people do things nowadays. We live very modest, quiet lives and don't spend a lot on unnecessary things. I also know that everyone has different things going on their lives and might not want/ be able to do what we are doing.

Here is our story.

We graduated in 2016 with Bachelor's degrees 15k debt in total, married for 3 years, lived in his parents basement for the first year for free and now are in an apartment. He makes 50k a year, and I work part time making 16k per year. I also get a 500$/month discount on rent because I clean the building 10 hours/week.

We live off his 50k salary, and my 16k salary goes to savings.

Before TTC we have set minimum savings goals for ourselves: Fully pay off school debt, at least 3 months expenses for emergency fund, and 20% house down payment, tithe 10%, contribute 12k/year to retirement total. We have met this goal as of this year.

Here's our ideal savings goals before TTC: Fully pay off school debt, 15k emergency fund, and 40% house down payment, tithe 10%, contribute 15k/year to retirement total. We will meet this goal in 2021.

Once we have kids, my 15k salary will go away because I will be staying home and quit my job. But we won't miss it because we never depended on my income to live, only to save. Our expenses will be a little more by the time we move, but he has a history of salary of 5% annual raises so that will continue to fill any potential gap.

This budget may seem impossible but we have made it work for us. We are happy to live modestly in order to create the life we want for our family. It takes a major mindset shift to do this. You can't live like everyone else around you. You will probably have to cut your standard of living. But you can do it if you're willing!

Questions for you:
1. Does any of my story sound appealing?
2. Do you have a minimum savings goal and ideal savings goal?
3. How much debt do you have in total?
4. Are you and your hubby on the same page about timing of TTC?

 

[skyfox]

@victoriablackwell We technically don't have a "baby savings" goal, but we have a goal to save for a house and pay off my student loans asap. We are on track to have both savings/pay off goals finished within the next 18 months. We also have a specific amount in our checking that we like to keep which is roughly 5 months of income in case of emergencies. I'm also not planning on returning to work after having a baby at least for the first year or so, but my husband makes 3x more than I do so we can live off of his income as long as we are out of debt on the student loans.

I know it's probably better to wait at least 6 months on our end, but I'm very impatient and it could take that long to get pregnant anyway. It's not going to affect us much if we get pregnant right away though. We have a 2 bedroom duplex with plenty of room for a baby, so if it takes us a little longer to find a house, we are okay with that. Especially since this house will probably be our forever home.

 

[phil112]

@victoriablackwell My time line just got pushed out significantly. Not because of money but because I got excepted into my first choice school.

My goals for savings

6 months emergency savings
10k pregnancy savings
2,000 a month left over after expenses currently so we have 1k for baby and can save 1k a month

I know that those are pretty high but it helps me cope because I know we will be very financially secure when we decide to have kids.